Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he's one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written, yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - author of Things That Make You Go Hmmm, one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, 'MacroBusiness'.

Thursday, 19 February 2015

Capital city land prices soar (accelerating higher +10 percent)

Land prices soar to record highs

A lot of debate happening in the "Twittersphere" this morning about whether housing supply is relevant to Australia's dwelling prices.

I'm not sure why people try to argue that's it isn't relevant, but anyway, my view is obviously that it is.

Without further ado, moving on to today's release from the Housing Industry Association (HIA), and we can see that due to a lack of supply, Australia's capital city land prices are soaring, with median lot prices in Australia accelerating higher over Q3 2014.

The HIA data showed that median lot values jumped by another 3.3 percent over Q3 2014 to a record high.


Gains all driven by capital cities

It is essential to note, however, that this acceleration in prices is not in any being driven by regional land prices, with median lot values increasing only marginally by 0.7 percent.


However, capital city land prices roared higher - going almost vertical - jumping by a massive 4.7 percent over the last quarter to record 10 percent growth over the past year alone to another all-time high.

Tim Lawless of Core-Logic RP Data noted that the decline in the number transactions does nto bode well for dwelling approvals over the medium term, which sounds logical enough.

Accelerating prices are due to slow supply

In the words of the HIA:

"There are clearly pressures building in terms of the available residential land supply. Acute supply bottlenecks are affecting Australia's residential land market.

The number of transactions fell while price growth accelerated. Turnover decreased by 16.7 percent in the quarter while at the same time prices grew by 3.3 percent.

These are the classic hallmarks of a market which is fast running into supply problems.

The process of delivering new land supply and infrastructure is too slow and too expensive. Policymakers have to intervene to ensure Australia's long term housing needs are met."

Quite.

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